'Pre-eminent' Australians to be made knights or dames under a new award, PM Tony Abbott says

Outgoing Governor-General Quentin Bryce, in Canberra this morning with Tony Abbott, will be the first Dame under the new arrangements.

AAP: Stefan Postles

Prime Minister Tony Abbott has brought back the titles of knights and dames for "pre-eminent" Australians, nearly three decades after the honour was abolished by the Hawke Labor government.

The honour will be known as a knight or dame in the Order of Australia and will be the nation's highest award.

It will be automatically bestowed on the serving governor-general with up to four created per year by Her Majesty the Queen on the recommendation of the prime minister.

The first dame is the outgoing Governor-General Quentin Bryce and the first knight will be her successor, former Defence Force chief General Peter Cosgrove, who will take on the title of "sir" when he is sworn in on Friday.

"This new award will go to those who have accepted public office rather than sought it and who can never by virtue of that office ever entirely return to private life," Mr Abbott said.

The Prime Minister, a former leader of Australians for Constitutional Monarchy and an avowed monarchist, said he thought this was an important "gracenote in our national life".

He said he did not believe the current honours available to Australians were enough to acknowledge the achievements of some.

"That is for eminent achievement. This is for pre-eminent achievement," he said.

"The existing companions, officers and members of the Order of Australia continue as they should, but this will be a higher honour."

He said it was his intention that politicians would not receive the honour but he could not rule it out.

"It doesn't preclude anyone except people who have not given service of extraordinary and pre-eminent nature," he said.

"My anticipation is that the people who may receive this honour will be those who have accepted rather than sought public office.

"Politicians of course have sought public office. That's the nature of the business that I'm in."